Who is the King of 15 Year Mortgages?

If you have been living under a rock or on a deserted island you may not know about the historic low mortgage interest rates.  Since statistics have been kept in 1933, never before have mortgage rates been this low in our nations history.  The lowest fixed rates of all are the 15 year variety.  They are below 3 and quite possibly dropping further.  A little know fact about 15 year mortgages is that only 1% of the population actually obtains a 15 year mortgage.  Most people want the comfort of the lowest payment available to them, thus they choose the 30 year option.  I am drawn to the fact that the interest rates are as much as .75% lower for a 15 year than a 30 year mortgage.  You would think that the payments would be comparable to each other, but they are not.  The payment is roughly
$ 200 higher for a 15 year mortgage for each $ 100,000 borrowed.  It scares most borrowers to death. But if you compare the current rates of people who have purchased their homes in 2007 and are still making payments based on interest rates in the 6% range, the 15 year payment at today's rates are comparable to what they are currently paying. If you can afford the payment now you should be able to afford the new payment at 15 years in the future.  Most borrowers can shave off 10 years on their mortgage and still be at a comparable payment to what they are currently paying.  Since I show this analysis to most customers, I have seen a dramatic increase in the number of borrowers obtaining 15 year mortgages.  My percentage of customers getting 15 year mortgages is 600% higher than the national average.  Did you know that there is no credit score requirement for a 15 year mortgage other than the minimum 620.  There is no effect on the interest rate charged.  Maybe you should consider a 15 year mortgage.  Come to the King of 15 Year mortgages for your next loan.

Andrew Williams
NMLS # 118317
Abacus Regional Mortgage
484 695 5972

FHA Streamline Refi NO DOC ?

FHA Streamline refinances are available to anyone who has a current FHA mortgage, though not everyone is eligible to partake in them.  First of all,  the interest rates currently offered must be signicantly low enough to save the customer at least 7.5% on their monthly payment.  Second, with the ever increasing Monthly Mortgage Insurance Premiums added to the loan, the monthly savings from the lower interest rates must more than make up for the higher insurance premiums, as well.
Third, borrowers must be current with their present mortgage payments for at least the past 12 months.  In addition, most lenders are requiring a minimum score of at least 660-680.  Some require as much as 720.  If you are one of the fortunate ones who fit all of these criteria, you may still not be eligible based on some other factors.

What if you have recently changed employment? I have had borrowers turned down by many lenders because they have become newly self employed?  They don't have a 2 year track record of earnings for their new business endeavor, thus they don't qualify to get any kind of a mortgage, let alone a streamline refinance through FHA.  What do these people do for a loan? In the past, we had mortgages for the self-employed borrower who couldn't produce the needed income necessary to qualify.  These loans were known as NO DOCS ( No documentation required ).  They came in many forms of loans.  They were called NIV ( No income verification), Stated, No Ratio, SISA ( Stated Income, Stated Assets) and NINA ( No income , No assets ).  All of them were a form of a NO DOC in some way or another.  Many economists felt that these types of loans were the main reason our economy took such a tumble.  These loans allowed un qualified people to buy homes that couldn't afford them.  Many are the foreclosures you see today.  In March of 2009, the governor of Pennsylvania Ed Rendell signed a bill outlawing these types of mortgages in any form.  All loans require some form of verification of assets and employment.   

I do have a lender that doesn't require any documentation regarding employment other than stating it on the mortgage application.  Even if someone is newly self-employed, they can qualify for the FHA streamline refinance as long as all of the above criteria are met.  The income section of the application is left blank.  All current and previous employers must be listed on the application going back two years.  A bank statement showing the money needed for closing is required from the borrower. 

In some cases, we as the lender can pay most of the closing costs for the borrower.  If you are one of the individuals who purchased your home in the height of the market prior to May 29, 2007, you are eligible to receive the discounted monthly mortgage insurance and no up front premium.  In addition, the streamline refinances don't require an appraisal of the property, so even if you have little or no equity in your current property, you will still be eligible for this loan. 

For more information please go to www.abacusmort.com and use the link "Full Application".

Andy Williams
President NMLS #118317
Abacus Regional Mortgage
484 695 5972

CAN YOU REFINANCE EVEN IF YOU DON'T HAVE ANY EQUITY?

The answer is YES!  The government just rolled out the new HARP loan.  This program allows people with Good Credit, but no equity in their home, a chance to refinance and take advantage of these low rates! 

Here's how it works: Any homeowner can take advantage of this program if they:

1. Have purchased and settled on a home before June, 2009,
2. Have a Fannie Mae (FNMA) or Freddie Mac (FHLMC) held mortgage,
3. Don't owe more than 105% of the home's value (If home is a Row or a Twin),
4. Don't owe more than 150% of the home's value if the subject property is a (Single),
5. Have not been 30 days late on any mortgage payments,
6. Have a minimum of a 660 credit score.

If you or anyone you know meets all of the above criteria, you or they can take advantage of this program.
The interest rates for this program are slightly higher than normal rates, so you need to make sure that this program will work for you.

If your loan has PMI insurance included in the monthly payment, we need to determine who the PMI insurance company is just to make sure that they are participants in this program.  Participating PMI companies have special rates for these loans where their premiums won't increase over what you are currently paying on your existing mortgage.

Many of the loans acquired during the years of the peak housing prices are combination loans such as: 80/20s, 80/10/10s or 80/15/5s.  As many of you know, this meant that you were given a 1st mortgage, as well as a home equity loan, in order to avoid having to pay PMI insurance.  This refinance WILL NOT include the payoff of any junior liens ( Home Equity loans, Lines of Credit or 2nd Mortgages ).  These secondary lenders will have to agree to Subordinate their liens.  This means that they will have to allow the current 1st mortgage to get paid off with the refinance.  They will have to step back into a 2nd lien position on the property, once again.  Most lenders are willing to do this given the circumstances surrounding the current state of the housing market. 

This loan offers a chance for someone, who were told they can't take advantage of these low rates, to refinance their mortgage and either reduce their monthly payment, or reduce the remaining term of their loan.   You can't borrow any additional money to do any repairs or consolidate bills.  This program is only for those looking to get a better interest rate.  Closing costs can be rolled in to the mortgage to a maximum of 4% of the total loan amount.  This should cover most if not all of the closing costs. 

Please contact me for more details regarding the specifics of this program.

Andy Williams NMLS # 118317
President
Abacus Regional Mortgage NMLS # 113984
484 695 5972

DEPRESSION DOESN'T LAST LONG!

Every year the kids go back to school, and in recent years, leave for months at a time. I know the time is getting shorter when July heat and humidity gives in to August moderate temperatures. But after I enjoy the bittersweet Labor day holiday, the NFL starts. It doesn't take long to get over the end of summer and move on to the fall. I don't care if it rains, hails, thunders, or snows. Nothing can bother me on Sundays unless the cable goes out! So go ahead, I dare you to take my kids away from me, take the hot swim days away, I don't care! I have my football!

LOW RATES DUE TO SHAKY ECONOMY

It is amazing to me how much bad news continues to come out each day about everything from the economy to the housing market, and job market. Here's a bit of good news. The interest rates were supposed to be climbing along with gas prices by the beginning of summer, yet neither happened. In fact, the interest rates have dropped, and the Federal Reserve has promised to keep the Federal Funds rate at 0% for 2 more years. This means that most variable rate mortgages ( home equity lines of credit, commercial loans ) are going to stay low for at least 2 more years, too. Mortgage rates are not based on the Federal Reserve interest rates, but they are based on the sale of treasury bills, economic news, and other factors that effect the stock market, as well. With the mortgage rates at or near their historic lows, buyers and homeowners need to take advantage of them now. They will not stay this way for long. I have seen mortgage rates as high as 18%! Believe me, enjoy them while they last.

Andy Williams
President
Abacus Regional Mortgage
484 695 5972